tv World Business Today CNN August 30, 2011 1:00am-2:00am PDT
baby at 30. >> i know you did. >> i'm 29. >> exactly. >> i also said i was going to retire at 30. >> could be a big year. >> who knows? i'm not retiring. >> can we expect the patter of beyonce and jay-z's? >> only god us knows. >> would you mind asking him to tell me. >> i'll whisper, but you can't tell anybody else. >> god knew and i suspect by the size of her bump that beyonce knew as well. we're going to reair the whole interview, fascinating hour with the world's top pop star, beyonce, this friday. that's all for us tonight. congratulations to beyonce and congratulations to beyonce and jay-z. -- captions by vitac -- www.vitac.com i'm at cnn in london. here are the headlines this hour. libya's moammar gadhafi is still at large. but his wife, three of his children and some of his grandchildren have fled to neighboring algeria.
libyan rebels say if gadhafi's relatives are not returned, it will be aggression against the people. turkish president says his government lost its confidence in damascus. the two countries had a close political and economic relationship. he says syria's crackdown changed that. the remnants of hurricane irene are in canada where hundreds of thousands are without power. across the border in the u.s., irene's caused damaging floods across several states. 27 deaths are blamed on the storm. japan's parliament selected yoke schick ohno da as the new prime minister. know da will take up the post after being endorsed by the emperor. that's expected to happen wednesday much those are the headlines from cnn. the world news leader.
world business today starts now. good morning. i'm charles hodson from london. good afternoon from cnn hong kong, i'm andrew stevens. welcome to world business today. the top stories this tuesday, the 30th of august. the new prime minister-elect of japan, with so many challenges ahead, bets are being taken on how long he'll last. >> growth is slowing in india as higher interest rates put the brakes on consumer demand. >> coming to a screen and a household near you, the chinese brand using movies to break into developed markets. >> the markets,let get on to stock mark. big day in europe on monday. news of the greek bank merger
sent shares soaring in athens. investors also reacting positively to ben bernanke's speech last week. snapping up a few bargains. let's look at the markets and we are seeing some quite interesting moves there. particularly the london ftse. that was closed for a public holiday on monday. pitch of catch-up going on there. it's up.4%. so is the dax, zurich smi up by less than a quarter percent. some moves, we're seeing bargain hunting, things like luxury goods and commodity stocks being bought as well as the banks. quite a broad-based recovery for now, anyway, andrew. >> buying electric. that says something about confidence or maybe it says the rich are recession proof. who knows?
in asia, stocks have risen for a fourth day in row. also by the unexpected strength of the u.s. consumer. the u.s. could be headed back into recession. that was how the markets ended up. the nikkei up 1.1% as the new prime minister was elected by the parliament. hong kong up 1.7: strong performance. shanghai continuing to follow concerns about the inflation picture. financials still under some pressure. stocks in taiwan closing higher today, including a big surge by precision. that's the world's largest contract electronics maker. despite a drop in profit of more than 20% of $447 million. the stock was up by almost 7%. that's on second quarter improvements in hon, hai's profit margins. they make apple, sony and other
big names consumer electronics brands. meanwhile, some mergers and acquisitions news from australia. the coal mine of macarthur accepted a sweetened $5.2 billion take controversy from the u.s. energy group peabody and the world's biggest steel maker. the largest maker of pulverized coal, a raw material used in making steel. peabody has made a bid for macarthur last may, but that was rejected. bank of america is selling half of its stake in china construction bank. the deal is expected to help boa -- the stock up. the shares of china construction banks. reports say that singapore's sovereign fund may buy a part of the l.a.'s former state in the chinese bank. charles? >> overall, a solid day of trading in the united states with the stock markets recording
significant gaps by the closing bell. surprising in a way because of the impact hurricane irene and making it difficult to get to wall street even. stocks rose off the news of that greek bank deal as mentioned. also we had that improved domestic consumer spending. closing numbers, a powerful rally. up by 3 and a third percent in the case of the nasdaq. equally 2 and three quarters for the s&p 500. the blue chips up by 2.25% at the dow. however, there is a however, some of those gains may be wiped out when trading begins later on tuesday. this is where we're standing in terms of the u.s. futures and pre-market action. a little bit of that bargain hunting. people seem to be taking a bit of profits on the bargain hunting, if you like. that's what it looks like. up about a quarter of a percent, andrew. okay, charles. japan's parliament has elected.
yoesh schick ohno da the new prime minister much the he's about to become the sixth leader in just five years. he takes the top job just as new figures showed persisting weakness in asia's second biggest economy. we're joined live from tokyo. let's start with the bad news on the economy. >> well, the bad news in the economy is that what we're seeing is a trend. ever since what we saw during the march 11th earthquake and tsunami is a continued pressure, downward pressure on japan's economy. no matter which way you look. consumer spending, unemployment. which did pick up slightly. what you're seeing is pressure in all sides, including the strong yen. all these factors put together because there are a lot of facts and figure that is did come out. what it all adds up to is that japan's economy is in trouble and it is facing even more trouble as we move ahead. so the question is, is will this
new prime minister, once he's officially installed, will he be able to tackle all of this? the question there is not whether or not he has the skills. a lot of people have faith that he does have those fiscal skills in place to try to tackle some of the restructuring that japan desperately need. that namely being trying to tackle this enormous public debt amid a slowing economy, trying to tackle the strong yen. what he is suggesting is raising taxes. a very tough issue. also cutting spending. all of this people have faith in that he can maybe accomplish that. but it's whether or not he's going to be able to turn that into legislation and many analysts are questioning whether he has the power and the vision to do that. here's what one told us today. >> our people already -- are people already doing an over under and how long he'll be around? >> i think they already are. the good thing about noda, he comes in with low expectations. the bar is set low for
leadership in japan by his hapless predecessors. the japanese people want more dramatic bold leadership. but the japanese leaders in recent years have been tentative, half steps, half measures and noda looks to be more of the same. >> kingston says what this country truly needs and what a lot of analysts we've spoken to frankly say what this country needs is someone who has that bold vision and leadership. you have to look many years back before you can find it among japan's prime ministers. the last one that really did try to sort of generate that sort of public and private mandate along with a political mandate to push a strong agenda through. regardless of whether or not you are a fan of koizumi and his legacy, there is no question that he was able to unite the country. that's what this country needs, especially when we talk about a post disaster japan and these
ongoing weak figure that is keep coming out. andrew? >> obviously, he's going to have to start by getting, as you point out, the politicians need to be on board. but he needs the electorate on board too. this is the man who i think in weekend polls was -- in polls amongst japanese people was getting about 9% popularity. so why did the party opt for him at all? >> reporter: because when you look at all of the various candidates and remember, this is about internal party politics. internal factions. it's a lot like when you vote for the homecoming queen in high school much that's really how simple it is. it's who you're friends with. who is going to get your personal priorities ahead. that's what politics in japan has really come down it. if you look at all of the different candidates, he was the least objectionablebrokers in t.
this was about party politics, factions, friendships, very little to do with the issues facing japan and almost nothing to do with the voters of japan. >> pretty weak base on which to build a platform to save the world economy. good to talk to you. good for your analysis. joining us live from tokyo. charles? >> let's move from the second largest economy in asia to the third largest and in a way, these are two countries who probably wish that they had each other's problem. one of japan's struggles to ramp up growth, india is trying as hard to cool down. new figures show that the third largest economy in asia, which is indeed india, grew faster than expected in the second quarter with growth off 7.7%. monica joins us from mumbai with more. monica, this is a mixed blessing. at the same time the inflation rate is above 9%. >> that's absolutely right, charles.
while growth has been good, in fact i talked to a number of economists this morning to get their reaction to the gdp figures and overall, the reaction has been not bad. people have said that the dproet is predictable. coming in at 7.7%. that's a little bit lower than the previous quarter, which was 7.8%. the reason we've seen the slowdown is because of the sale of monetary tightening. it's increased interest rates 11 times in the last 18 month. 11 times in 18 month, that's some really serious tightening going on over there. the reason the central bank has been forced to do that is because of what you talked about,charles. which is india's record high inflation. inflation remains at 9%. that is a huge cause of concern for india and the main reason the rbi raced interest rates. what's happens as a result of raising interest rates,
consumption in india has gone down. the one thing that distinguished the economy from a lot of other countries, it's been domestic demand. when you have such high interest rates, demand has gone down and there's no way better -- no other specter that illustrates it better than the auto sector. you and i have talked about this, charles, a number of times the last few months on air. we've talked about india's record auto sales. every month auto sales hit a new record high. this year in july, we've seen auto sales for almost the first time in three years. that gives you a pretty good sense that indian customers are cautious about spending. charles? >> it's fascinating, because it's a challenge for the government. it would dearly like to get on top of the problem of poverty. but it's got a huge problem of debt and deficits which makes it difficult for them to stimulate the economy. politically, over this corruption issue, maliki, it's
on the back too. >> very much so. the private corruption issue is at the forefront of the political scene in india. many people are saying in the economy, in fact, as you know the anti-corruption campaign that india has been caught up with the last few days. and now people are referring to the economy as an a no, ma'am ix. we're waiting to see what impact the anti-corruption movement will have on the indian economy. all the economists i spoke to today said, well, it's a great start and if this anti-corruption watchdog is implemented, if it's a success, this could really be a game changer for the indian economy. the big problem india has grappled with for years is corruption. not just as a -- the daily level when you drive a policeman on the road. but at a very serious level, on a very large national level. you can look back at the commonwealth games last year. look at the scandal we've seen
in the telecom sector the last couple of months. these sort of scandals have wiped billions and billions of dollars off o the new economy. if we can even start to have a slightly more corrupt-free or transparent society, there is a huge sense of optimism that it could really be a game changer for the indian economy and for growth. charles? >> thank you for joining us from mumbai. than i thanks to you. andrew? >> charles, an apology in the chase of dominique strauss-kahn. the former head of the imf, told staff members in washington on monday that he wanted to apologize to those hurt by his recent scandal. sexual assault charges against him were dropped last week after prosecutors say that they could not pursue the case. they said there were too many holes in the story told by the hotel maid who accused kan of assault and attempted rape. coming up, another prominent
businessman in court. the former hairdresser turned football entrepreneur fronts up the charges of money laundering in hong kong. the details in just a moment. ♪ [ male announcer ] sitting. waiting. hoping. that's a recipe for failed investing. open an e-trade account and open doors, seize opportunities, take action with some of the most powerful yet easy-to-use trading tools on the planet all built to help you maximize the potential of every dollar you invest. successful investing isn't done
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keep your family safer. check your steps at foodsafety.gov. [oinking] check in now on the price of gold. recovered some ground since monday when strong gains in the united states turned investors attention to riskier assets. at the moment, gold is worth just over $1793 an ounce. down almost $3. welcome back from cnn hong kong and london. this is world business today. >> carson yeung, the jailed millionaire chairman of birmingham city england has been granted approval to travel from hong kong to london. in june, a hong kong court confiscated his passport calling him a flight risk. so why did a judge make the revers reversal. we're joined with the details on that. >> today's reversal had a
million dollar price tag. that's pretty much the reason here. 8 million hong kong dollars in cash in yeung jumps his bail. that's a little more than one million in u.s. dollars and double the original amount. that sets him up to head to london, september 15, a couple weeks away, he'll attend club matters for four days. take a look at the latest pictures of carson yeung heading into court today. he's actually just being mobbed there by cameras and reporters. all this interest around him is because he's been charged with five counts of laundering 720 million hong kong dollars. meantime, he has not filed any plea. as he packs his bags, the question remains. will yeung actually come back? his lawyer, grossman, had this to say. let me pull this up here. he said there is no evidence whatsoever that he is a flight risk.
he argued that his client is a high-profile figure with too many business interests to disappear. pretrial is scheduled for december 7. the actual trial should start early next year. the prosecution plans to call fewer than ten wanss. >> ramy, thank you very much. charles? >> well, we're going to make a stop at the international weather center in a moment. we'll have an update on why southeast china is now hunkering down. the nascar nationwide se,
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welcome back. you're watching world business today live on cnn. a powerful storm killed 16 people in the philippines and caused significant damage in taiwan. now china is in its path. jennifer delgado is at the cnn weather center. tell me, jen, how does this compare to irene in terms of its size and destructive power? >> charles, big difference. it's certainly a smaller storm. structurewise. but we're also talking it being a tropical storm as opposed to irene when had it made landfall as a hurricane. a weaker storm windwise and a smaller one as well. really hard to find the center of sfek lags. it's off the coastline of china. it will make landfall in the next couple of hours. i want to point out to you, you notice rain through parts of taiwan and down towards area,
including philippines. some of the outer bands working down towards that region. as i said, it's going to make landfall within the next couple hours. it's going to be inland and go into an area of low pressure. this is go going to cause big problems with rainfall. we're talking widespread rain in some areas, especially along the province. as i go over and show you video, they're already getting ready for nam dal. this is what we like to see, people taking it seriously. bringing in their boats. preparing for rough seas. this is of the jay jong province. you can see fishermen really securing their boats much that's the right thing to do. i take you pack over to show you the rain coming down. we're seeing right along the coastline, there's for areas in red, we're talking 25 to 50 centimeters of rainfall. again, the problem is the storm is not history bringing. as charles mentioned, this is in the philippines. let's go through video out of
taiwan. this is just new to us. you can see the rain just pouring down. roads actually were just washed away. many roads buckled. rushing water across the area. problem is, when you get all this rain coming down and it's still coming down, the ground is so weak, it's going to continue to be a problem as we go through the next several days ahead. you can still see the rough seas through parts of taiwan. charles, back over to you. we're also going to talk about the economics of hurricane irene and how it shapes up with some of the storms and some of the damage that we've had across the u.s. this past year. >> okay. jen thank you very much. jennifer delgado joining us live from the international weather center. andrew? nigeria's charcoal business is heating up. the conservationists say the thriving industry is exacting too high a price from the country's forests. we'll tell you why. that's a recipe for failed investing.
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from cnn london, i'm charles hodson. >> i'm andrew stevens at cnn hong kong. welcome back. you're watching world business today. let's check back in on stock markets here in europe to see if they're continuing their ramp from monday. the numbers are up about 2% in the case of the london ftse. last time i looked. they still are. 2.5% for the ftse and the xetra dax. just over a half a percent.
one of the best and foremost in the region, the banks. reacting to a broker upgrade for royal bank of scotland, rbs up by 8%. barclays not far behind also up by 8%. deutsche bank and bnp up about 1.5%. the general run-up is helping there and also the european, the greek bank merger between euro and alpha that's helping and creating a bit of a more positive mood and i think the prospect of the -- the possibility any way of more as suggested by ben bernanke last friday is also helping. much due to factors. andrew? interesting one to watch ourt for as well, charles is what's happening on the consumer spending fund in the u.s. we have numbers out yesterday out of the -- that certainly helped markets here. alison kosik will have more on that in a moment. the nikkei closing up another
1%. hong kong up 1.7. shanghai continuing to show concerns about the inflation picture after the move by authorities in beijing on friday to rein in bank lending. australian markets up, but not so much. charles, it does seem to be this u.s. consumer spending number is rippling through markets at least in asia. i guess that's not surprising given asia's, the u.s. is a clear export market. >> it's interesting, isn't it? i think the sensitivity of the markets to this kind of good news does suggest that we're perhaps not really in a bear phase but a reserve judgment on that. let's go back to wall street now. u.s. futures trading lower, not by much after monday's strong gains. we are seeing a little bit of a -- bit of profit taking there off by a third to a half a percent. quarter of a percent. despite the huge run-up on monday. cnn's allison kos ib haskosik h
more. insurance stocks helped to lead the broad-based gains as did a strong rebound in consumer spending. the dow's rise marks the fifth time this month it gained 00 points or more. the dow soared 254 points at 11,539. the nasdaq added 3 and a third percent. and the s&p rose almost 3%. shares of major u.s. insurers rose sharply in the wake of hurricane irene. investors relieved that the damage wasn't as bad as initially feared. pushing all state, met life and travelers across the board. fpgs shares also rallied thanks to greek banks. investors hope the tie-up between euro bank and alpha bank could trigger more activity in the region. personal spending jumped 8 .tenths of one percent. the gain is the biggest in five months and largely thanks to a demand in cars. it's helping support the view
that the economy is not headed back into a recession. coming up tuesday, figures on home prices and consumer confidence along with minutes of the most recent meeting. it's supposed to be light leading up to the labor day holiday. that's a wrap of the day on wall street. i'm alison kosik in new york. a lot of interesting notes. those fed minutes much what was the thinking going on at the fed as the u.s. economic numbers were looking bleaker and bleaker. that will be out a few hours from now. also interesting developments on the economic front in the u.s. the president barack obama could soon have another new policy maker by his side at the white house. he's nominating as his chief economic advisor a man who had a lot to do with the cash for clunkers plan to stimulate spending in the u.s. approximate confirmed by the senate, alan krueger would return to the obama administration after standing down from a position at the treasury last year. he would replace austin goolsby
who went back to teach at the university of chicago a few months ago. the member of the original economics team remains now. that's the treasury secretary, tim geithner. but, mr. obama gave the newest recruit a glowing reference. >> alan brings a wealth of experience to the job. he's one of the leading economists in the nation. for more than two decade, he studied and developed economic policy both inside and outside of government. in the first two years of this administration as we were dealing with the effects of a complex and fast-moving financial crisis, a crisis that a second grade depression. alan's counsel at the treasury department proved invaluable. >> we heard alison kosik's report about an unexpected surge in american consumer spending and hopes for the economy. that hope is being reflected. the oil market with crude futures raising to the highest
in two weeks. right now, however, the nymex has crude losing ground. just 14 cents. quarter of a dollar to 87 and a quarter per barrel, andrew. charles, before the civil war, libya produced about 2% of the global oil supply. in recent month, out put shrunk to a fraction of that. what is the outlook for this industry now that gadhafi is out of power. john gutierrez looks to see whether history can be any guide. >> the national transitional council wants to bring oil to pre war levels. history suggests that goal may be a.m. birgs r bishs. the potential is there before moammar gadhafi took power, libya was producing 3.3 million bears a day. in 2010, it averaged 1.78 million barrels a day.
saddam hussein was flying high with 3.5 million barrels a day in 1979. one year into the war, that went to less than a million barrels a day. fast forward to the gulf war in 1991. production hit new lows of just 282,000 barrels a day. the fact has been a bumpy day. 2.4 million barrels a day. lower than it was three decades ago. now iraq has grand plans to hit 10 million barrels a day by 2020. finally, there is iran which had the highest production out of saudi arabia and the persian gulf at nearly 5.25 million barrels a day in 1978. during the war with iraq, that doubled 4 million barrels while the 1980s and '90s proved challenging, production is up to 4.25 million barrels. like libya and iraq, it remains below the pre-war levels. that look back concerns whether the ncc can revamp libya's national oil companies has many in the sector questioning
whether the pre-war target will remain out of reach in the six month ahead. cnn, abu da by. risk aversion seems to be easier. gold tumbling and regaining strength as the bargain hunters resurface. let's have a look at it now. slightly confused whether this is up or down. it looks according to the graphic that it is down a little bit. we should note that demand for jewelry on the increase in september. particularly in asia. due to autumn festivals and of course, the wedding season. andrew? >> okay. charles, we're going to switch gears now. for many barbecues or brides as they're known in south africa, charcoal is an essential ingredient. that helped fuel the production in nigeria. but it's taking a toll on the twind willing forests. kristin purefoy reports.
>> digging through the ashes he gets at one of nigeria's hottest commodities. charcoal. it's being brought up by local suppliers like matthew who say they're barely able to meet international demand in europe and america. >> how many containers of charcoal do you sell a month? >> a month? we can sell more than 40 containers in a month. how much does each container sell for? >> it's $450,000. >> that's about 3,000 -- over $3,000? timber is the essential ingredient for charcoal. still found in plentiful supply here in the forests of southwest nigeria. the wood is then collected, piled on top and the farmer then piles dirt on top of the wood. if you follow me around here,this is what it looks like when it's finished. it takes about seven days for the wood to be burned into charcoal after it's been lit.
then the farmer clears all of this earth off, leaves it to cool for another five days and then the charcoal is ready to be sold. there is, however, a problem. in this one community alone, they cut down up to 400 trees a day. conservationists expressed concerns about deforest station in nigeria. it's created for fuel and timber export. the nigerian government committed funds to trio owe projects. here the village has 200 trees replanted every day. but as we drove deeper into the forest, we saw little evidence of the reforest station projects that they say were under way here. still, they maintain every effort is being made. the charcoal industry is a vital part of the economy.
>> because of the -- people are not have work to do. but when -- nothing like -- so we -- >> he is one of nigeria's large scale charcoal exporters. there are no official figures for the charcoal exports but he estimates exports over 11,000 tons a year and is well aware to keep local storehouses full in the long-term, need sustainability. >> they're fairly good. fortunately, i think we have enough for -- to keep up with the demand. even though it's a problem, our environment. we know the consequences. we try to make sure as we -- we plant new ones and make sure -- >> a reminder once again of the delicate balance between
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world business today. damage reports from irene keep rolling in. that brings us to the big number on world business today. the estimated losses so far in the united states, $7 billion. less than half of that, only about $3 billion is covered by insurance. before irene hit the united states, it caused as much as $00 million worth of damage in caribbean. let's have a closer look at the damage that irene did leave behind. for that jennifer delgado joins
us from the international weather center. this is serious, perhaps not as serious as some but still quite a purr foul i am pack, isn't it, jen? >> absolutely. the disaster set back in 2008. as you said, million for irene. when you add in the other natural disasters for the year, we're talking roughly around $42 billion. now, to give you an idea, we've been talking about the rainfall, flooding was such a big problem for parts of the northeast as well as parts of north carolina. i want to show you over the time period we saw totals well over 400 millimeters, especially in parts of north carolina and up towards the northeast. now, right now, we're still dealing with flood warnings in place for many areas. anywhere in green you're seeing extending from atlantic city up towards maine. that means -- a lot of it is starting to go down and recede
through today as well as wednesday. as we go to the video, i want to show you video out of north carolina. this is out of kill devil hills. the results of the strong winds as well as the storm surge. a bad situation. as charles said, $7 billion is what they're estimating right now. let me take you back to the graphic. for right now for 2011 we've estimated roughly $10 billion disasters for 201. this gives you an idea of the tornado outbreak for the midwest and southeast. $7 billion. the mississippi river flooding, $4 billion. for the texas droughts and wildfires, $3 billion. certainly this has been a tough year. you have to keep in mind, still, we still have a ways to go for the atlantic hurricane season. so still those numbers are likely to go up. something we don't want to hear about. but the reality is, it's been a tough year for the u.s. in weather. >> okay. jennifer delgado, thank you very much. joining us live from the
international weather centerment andrew? charles, now, most people know that successful branding can make or break a company's future. sometimes you've got to go beyond borders to really get the message ou. we take a look at how some chinese companies are thinking big when it comes to branding, as in the big screen and big bucks. they're going west to get the job done. >> in transformers 3, you couldn't help but notice these big budget spielberg-inspired action scenes. but there's more than meets the eye. did you happen to know apple's ipad. a mercedes sls or facebook? about 70 brand names in all with four made in china. chie a labeouf sported a bond t-shirt. had a tv featured on this one.
mongolian milk is mentioned. computer maker lenovo's new laptop was a transformer itself. he explains why chinese brands want in on u.s. blockbusters. >> a lot of the more successful china brands, they have the ambition of going out west, conquering the american and also the european markets. placing your product into big project hollywood movie immediately gives you sort of an elevation. >> for lenovo, seen by many of one of china's more well-known brand, it's just the next step up to profits beyond china. >> this is part of us as a journey to build a brand awareness of lenovo as one of the leading pc and global technology company sniem lenovo declined to say how much they paid for placement. experts said it was probably worth the cost. the belief is that if a chinese
brand is perceived as having made it over here in the west, like in a hollywood movie, then chinese audiences will accept it and want it that much more. and while china brands look to take a position in currents or future blockbusters, say like in transformers here, branding experts say they should look to the past to learn from some of the best models. like in james bond's golden eye. >> pay attention, 007. first your new car. >> in 1995's golden eye, bmw debuted a new ride for james bond. it stands as one of most successful product placements ever. >> the z 3, the brand new car was a sexy car that bmw was coming up with. it felt like the kind of car that bond would drive. >> if you think this pay for play is too much, you wouldn't be alone. >> it's overused. i think people are getting sick of it. i think that it's really not a great strategy.
>> what isn't ridiculous are the surging masses of chinese headed to the movies. last year china's box office hit a record of $1.5 billion in seats. a surge of more than 60% from 2009. ramy incense yoe, cnn, hong kong. when we come back, a u.s. supermarket chain has come up with an idea on the economy. they've been sniffing out a new business plan for successful shopping and it's working. open an e-trade account and open doors, seize opportunities, take action with some of the most powerful yet easy-to-use trading tools on the planet all built to help you maximize the potential of every dollar you invest. successful investing isn't done by throwing ideas against the wall and hoping. it's done by lowering your costs and raising your expectations by using unbiased research and powerful screeners to build a diversified portfolio
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welcome back. live from cnn hong kong and london. you're watching "world business today." >> the smell of bread often hits you when you walk into supermarket. here anyway. a supermarket chain in brooklyn, new york developed a new sales approach. the store is peeling to customers' sense of smell. filling their senses in the hopes that they will fill shopping trolleys. cnn's financial correspondent felicia taylor got a whiff of the plan. >> if you're passing the sour pickles, it smells good. we buy the olives here. they're delicious. >> about 775% of what we sense as taste actually comes from our sense of smell. pretty important detail when it comes to selling food. the folks here at net cost market have figured out a way to actually boost that scent and here it is. >> i don't eat a lot of -- they
cannot attract me by package. the scent can attract me. that's why i brought this here. >> five machines are mounted on the walls throughout the store and pump out artificial scents like bread, chocolate, bacon and grapefruit. >> we wanted to test the power of the aroma. so we asked tanya, one of our produces if we could blindfold her and take her through the store and see what she can sense. keep in mind, she's never been in store. she has no idea exactly where we are going or what aisle we're in. >> meat. >> you smell meat. >> i got a whiff of meat. >> that's amazing. that's exactly where we are. >> okay. >> again, there's the device. something changed? >> are we like in the bakery section, dessert aisle? >> desserts, absolutely. >> yum. >> yum? customers had a similar reaction. >> yeah.
i do smell different x like bread smell different, like cooked foods smell different. even like bakery smells different. >> does this make you want to buy more things? >> everything is so yummy. you want to buy everything. >> the company has stores in new york and pennsylvania and already has plans to install the machines in all other stores besides this one in brooklyn sniem the goal is very simple. increase the sales by making our customers hungry. satisfied and happy. everybody will be happy. >> for the folks at net cost markets, they've already seen results with sales up about 5% in the last three months. that adds up to the sweet smell of success. felicia taylor, cnn, new york. i must admit, artificial scent, doesn't it make it false advertising? if you want to comment on that or other stories on the program, all you have to do is get in touch on our facebook page. go to facebook.com/cnn wbt.